FTC’s Invitation Homes Settlement: Federal Consumer Protection Laws In Rental Property Management

The Federal Trade Commission (FTC) announced a groundbreaking settlement with Invitation Homes, a large single-family rental home owner/operator, on September 24. The settlement, which includes a $48 million monetary judgment and substantial injunctive relief, introduces novel applications of Section 5 of the FTC Act (15 U.S.C. § 45) in excess of state and local law to: advertising rents and services, disclosing rents and fees in leasing, managing security deposits, credit reporting rent obligations, and advising residents of resident relief during the evictions process.

The settlement continues a recent trend of federal regulators' attention to market-rate residential property management practices. For example, last November, the FTC proposed a broad trade regulation rule covering unfair or deceptive fees; after tens of thousands of comments, a final rule is expected. In April, the Department of Housing and Urban Development (HUD) released guidance about the Fair Housing Act's application to resident screening and digital marketing practices. The Federal Housing Finance Agency (FHFA) announced in July resident notice and late fee protections tied to rental properties with Fannie Mae or Freddie Mac loans. Most recently, the Consumer Financial Protection Bureau (CFPB) focused on rental debt and the "financialization" of rent payment obligations in its September annual report on debt collection. More action by federal regulators is likely as housing remains a top issue for Americans across the country.

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